Our take...
The deal is highly significant for two major reasons. Firstly, it proves that at least one European exhibitor is convinced that the VPF model will fit in with its operational economics, unpicking a fear of some in Europe that a US-created model couldn't be adapted to the European market. The reality is that the VPF is the only proven model so far to work for a large-scale conversion, whatever the country of that conversion is. The model is based on a limited number of variables, and it can be made to fit the European market by changing these variables. The principal issue is one of exhibitor contribution; there is a real likelihood that an exhibitor will need to contribute to the conversion, if they go down a managed route, and the variables need to come in within a certain limit so that the exhibitor can afford this contribution. The added concern in Europe, one that was demonstrated during the Europa Cinemas Conference in Bucharest in mid-November, is that the VPF could leave some behind that can't fit into the model. This is why there is room in the market for several players, offering different models to European exhibitors. Therefore, instead of dismissing the VPF and other models in general, exhibitors and policy makers seeking to support their screens would be better served by looking at what will suit who. The second reason this announcement is significant is that it acts as a catalyst to others to take this matter seriously now. For French exhibitors, it is harder to dismiss or put off going digital if a competitor has announced their immediate digital conversion and will be able to exploit the competitive advantage of an all-digital environment against them in the near future. This will bring into sharp focus the sense of negativity that exists in France towards digital cinema.